Knowing how much you need to retire comfortably in Australia is key, MyBudget’s guide covers income targets, super savings, and essential retirement planning tips.
With Australia raising the pension eligibility age to 67, the stakes for retirement planning just got higher. But really, what does it take to truly enjoy retirement? The answer depends on several factors: your lifestyle goals, personal circumstances, health needs, housing situation, and average life expectancy. Let’s get into the details of what a comfortable retirement actually costs, the impact of living standards, and how budgeting now can help secure the lifestyle you want later.
How much income do I need to retire comfortably in Australia?
To maintain a comfortable standard of living in retirement, ASFA (Association of Superannuation Funds of Australia) has set out a range of annual income targets. Here’s what they recommend for those aged 65-84, as of June 2024:
If you’re closer to 85, ASFA’s numbers shift slightly, reflecting what they expect could be lower spending:
These figures assume you’re mortgage-free and own your home. If you’re renting or plan to have a mortgage in retirement, you’ll need to factor in those additional costs.
How much super do I need for a comfortable retirement?
ASFA’s recommendations for a comfortable retirement super balance remain steady, even as the cost of living fluctuates. Here’s what you need by age 67 for a comfortable or modest lifestyle:
ASFA’s estimates assume you’ll receive part of the Age Pension. And while they’re a helpful rule of thumb, remember: longer life expectancies, inflation, and the rising cost of healthcare mean it doesn’t hurt to aim higher to keep that superannuation nest egg secure. You can also check your needs with this retirement calculator to see how your super savings align with your retirement goals.
How does your super balance compare to the average?
Curious how your super stacks up? Here’s what Australians on average have saved, according to Canstar data from July 2024:
Many Australians, particularly women, fall short of what’s recommended for a comfortable retirement. Career breaks; especially for those raising families; can lead to lower lifetime earnings, reduced super contributions, and a resulting superannuation gap that can be hard to close later on. This reality makes early planning and proactive saving even more crucial for women to reach their retirement savings goals.
What if I don’t have enough super savings?
If your super savings aren’t where they need to be, there are still ways to create additional income and build a secure financial future:
- part-time work: many retirees choose part-time work for the benefits of both extra income and staying active.
- budget adjustments: streamlining your spending habits with the help of a financial planner can help free up funds for saving.
- extra super contributions: making voluntary or additional contributions to your super can boost your savings over time and help reach your retirement income goals.
What is the retirement age in Australia, and when can I access the Age Pension?
In Australia, the minimum retirement age to qualify for the Age Pension is currently 67 for those born after 1 January 1957. If you were born before that, you may qualify a little earlier. With increasing life expectancies, the government has floated the idea of raising this to 70, which makes it even more essential to consider your retirement plans early on.
Why should I start planning for retirement early?
The earlier you start planning, the more options you’ll have to achieve your retirement dreams. Creating a budget that includes super savings, emergency funds, and other income sources makes a huge difference over time.
How can MyBudget help with retirement planning?
At MyBudget, we believe everyone deserves to enjoy retirement free from money worries. With over 25 years of experience guiding clients toward their financial goals, our team is here to make retirement planning simple, stress-free, and tailored to your needs. We work with you to create a budget that covers everything from managing monthly bills and avoiding late fees to building long-term savings and planning for future retirees. We’ll even contact creditors on your behalf, relieving pressure so you can focus on enjoying life.
Whether you’re looking to set up retirement savings, build emergency funds, or stay on track with your financial goals, MyBudget is here to guide you every step of the way. With our support, you can get ahead and stay ahead, so when retirement arrives, you’re ready to enjoy it to the fullest.
Ready to make your retirement goals a reality? Enquire online or call MyBudget on 1300 300 922 to start planning for a secure, enjoyable future.
Cheryl is part of the MyBudget Corporate Finance team, ensuring everything runs smoothly behind the scenes. A big fan of side hustles, her own is writing for MyBudget, where she shares insights from her personal journey through separation, single parenting, and surviving cancer. Cheryl brings a relatable perspective to every piece, blending real-life experience with a fresh, down-to-earth approach.
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